Q1 report: Rough start to ’14 for Atlantis owner

After its best year ever in 2013, the first quarter of 2014 proved tough for the owner of Reno’s Atlantis Casino Resort Spa.

Higher operating costs, weather impacts at its Colorado casino and a sizable drop in room revenues at the Atlantis all helped to pinch profits in the January-March period for Monarch Casino & Resort Inc.

In its earnings report today, Monarch cited the absence of the mammoth Safari Club International convention in Reno this past winter as the key driver in a 12.6 percent decline in hotel revenues at the 824-room Atlantis.

The convention, which has moved to Las Vegas, was held at the Reno-Sparks Convention Center across Peckham Lane and connected by overhead walkway to the Atlantis property.

Combined with a small slump in casino revenues and renovation costs and weather challenges at its Black Hawk Casino west of Denver, Monarch’s first-quarter net income was $3.27 million, down 23.1 percent from a year earlier.

In addition, Monarch reported a 14.7 percent drop over the year in EBITDA, or earnings before interest, taxes, depreciation and amortization, considered a key industry barometer of a gaming establishment's fiscal health.

Monarch CEO/Co-Chairman John Farahi devoted a statement accompanying the earnings report fully to the Colorado property, which the company acquired in 2012 and is undergoing renovations including a new parking structure on an adjacent 1.5-acre parcel of land.

“Black Hawk had 50 percent more snow days than last year's first quarter and all but one weekend during the 2014 first quarter was impacted by adverse weather,” Farahi said.

He added, “To accommodate construction, we have had to reduce the number of slot machines on the gaming floor by approximately 13 percent,” and the first phase of renovations is expected to be done in the third quarter.

"Finalization of the master plan's detailed design has taken longer than originally anticipated due to modifications we are making to further enhance and value engineer the project,” Farahi said. “Once the detailed plans are completed, we will announce the project's cost estimate and construction timeline.”

Washoe County’s post-recession tourism rebound, as shown in the first annual increase in gaming revenues last year since 2006, helped Monarch’s 2013 profits double from 2012 to $17.96 million.

In the Nevada Gaming Control Board’s latest monthly gaming revenue report for February, revenues in Washoe County dropped 1.4 percent from February 2013 but rose 0.8 percent in the Reno submarket.